Gutierrez v. Johnson & Johnson ( 2020 )

1 2 3 4 5 UNITED STATES DISTRICT COURT 6 SOUTHERN DISTRICT OF CALIFORNIA 7 8 LOUISA GUTIERREZ, an Case No: 3:19-cv-01345-DMS-AGS 9 individual, DEBBIE LUNA, an individual, on behalf of themselves 10 and all persons similarly situated, ORDER GRANTING PLAINTIFFS’ MOTION FOR LEAVE TO AMEND AND 11 Plaintiffs, FILE A FIFTH AMENDED COMPLAINT 12 v. 13 JOHNSON & JOHNSON CONSUMER, INC., a New Jersey 14 Corporation, BAUSCH HEALTH US, LLC, f/k/a VALEANT 15 PHARMACEUTICALS NORTH AMERICA LLC, a New Jersey 16 Limited Liability Company, 17 Defendants. 18 19 20 Pending before the Court is Plaintiffs’ Motion for Leave to Amend and File a Fifth 21 Amended Complaint. (ECF No. 45.) The matter is fully briefed and submitted. For the 22 following reasons, Plaintiffs’ motion is granted. 23 I. 24 BACKGROUND 25 This case arises out of Plaintiffs’ putative class action against Defendants Johnson & 26 Johnson Consumer, Inc. (“Johnson & Johnson” or “JJCI”) and Bausch Health US, LLC’s 27 (“Bausch” or “BHUS”) sale of Baby Powder and “Shower-to-Shower” products (“Talcum 1 Products”) in California. Defendants allegedly failed to warn Plaintiffs of carcinogenic 2 ingredients in their Talcum Products and engaged in an ongoing decades-long campaign to 3 convince the public, and therefore Plaintiffs and proposed class members, that their products 4 were safe. Plaintiffs allege these efforts constituted affirmative misrepresentations because 5 Defendants knew that Talcum-based products contained hazardous substances like 6 asbestos, asbestiform fibers, lead, silica, and arsenic, and had known since the 1970s.1 7 (Plaintiffs’ Fourth Amended Complaint (“FoAC”), ECF No. 42, ¶¶ 38-43.) Based on these 8 alleged facts, Plaintiffs filed a Class Action Complaint in the California Superior Court on 9 May 20, 2019 against Defendant Johnson & Johnson. On July 18, 2019, Defendant 10 removed the case to federal court. (ECF No. 1.) Plaintiffs thereafter filed a First Amended 11 Complaint (“FAC”), naming Defendant Bausch as the correct manufacturer of the “Shower- 12 to-Shower” product, a Second Amended Complaint (“SAC”) (ECF No. 12), and a Third 13 Amended Complaint (“TAC”) (ECF No. 21). On December 13, 2019, Defendants filed 14 Motions to Dismiss Plaintiffs’ TAC. (ECF No. 28, 31.) On April 27, 2020, the Court 15 granted Defendants’ Motions to Dismiss for failure to state a claim under Rule 12(b)(6), 16 and granted Plaintiffs leave to file a Fourth Amended Complaint (“FoAC”). (ECF No. 41.) 17 Plaintiffs filed the FoAC on June 9, 2020 (ECF No. 44), but thereafter filed the present 18 motion for leave to file a Fifth Amended Complaint (“FiAC”). (ECF No. 45.) 19 To remedy the deficiencies outlined in the Court’s Order dismissing the TAC on 20 April 27, 2020, Plaintiffs filed a FoAC that “specif[ied] deceptive advertising conducted by 21 Defendants where they claimed that their talcum products were pure and safe, when in fact 22 they were not.” (Motion for Leave to Amend (“Mot.”) at 4.) After meeting and conferring 23 with Defendants, Plaintiffs “recognized that additional facts might be necessary to plead 24 with the specificity required under Rule 9,” and thereafter filed the present motion. (Id. at 25 5.) In their proposed FiAC, Plaintiffs added more details about Defendants’ alleged 26 1 A more detailed description of the facts underlying this case is available in the Court’s 27 Order Granting Defendants Motions to Dismiss Plaintiff’s Third Amended Complaint, 1 deceptive advertising during the class period, including that Defendants marketed baby 2 powder under the slogan “#1 Choice for Hospitals, #1 Choice for Parents,” even though 3 “baby powder has long been deemed dangerous by pediatricians,” and “such claims for 4 baby powder [were] absolutely false.” (Ex. 2 to Mot. at 37–39.) Plaintiffs also alleged that 5 Defendant JJCI made agreements with retail establishments to place their Baby Powder 6 product in the same aisle as other baby products—“a design to give the impression that the 7 Talcum Products are pure and safe.” (Id.) Plaintiffs added details about when Plaintiffs 8 relied on these statements, clarified claims against Defendant BHUS, and incorporated these 9 alleged facts into their CLRA claims. (Id. at 39, 42, 53–58.) On June 19, 2020, Plaintiffs 10 filed the present motion to amend. Defendants oppose the motion. For the following 11 reasons, Plaintiffs’ motion is granted. 12 II. 13 DISCUSSION 14 Under Rule 15(a), a party may amend his pleading “once as a matter of course at any 15 time before a responsive pleading is served.” Fed. R. Civ. P. 15(a). Otherwise, a party may 16 amend “only by leave of the court or by written consent of the adverse party.” Id. Leave 17 to amend under Rule 15(a) “shall be freely given when justice so requires.” Id. Therefore, 18 the decision to grant leave to amend is one that rests in the discretion of the trial court. See 19 International Ass’n of Machinists & Aerospace Workers v. Republic Airlines, 761 F.2d 20 1386, 1390 (9th Cir. 1985). This discretion must be guided by the strong federal policy of 21 favoring disposition of cases on the merits and permitting amendments with “extreme 22 liberality.” See DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987). But 23 leave to amend “is not to be granted automatically.” Jackson v. Bank of Hawaii, 902 F.2d 24 1385, 1387 (9th Cir. 1990). 25 When determining whether to grant leave to amend, courts generally consider five 26 factors, known as the Foman factors: “undue delay, bad faith or dilatory motive on the part 27 of the movant,” undue prejudice to the non-moving party, “futility of amendment,” and 1 “repeated failure to cure deficiencies by amendments previously allowed.” Foman v. Davis, 2 371 U.S. 178, 182 (1962); In re Western States Wholesale Natural Gas Antitrust Litig., 715 3 F.3d 716, 738 (9th Cir. 2013), aff’d sub nom. Oneok, Inc. v. Learjet, Inc., 575 U.S. 373 4 (2015) (applying Foman factors). Each Foman factor will be addressed in turn. 5 A. Undue Delay 6 Contrary to Defendants’ argument, the Court does not find allowing the proposed 7 amendment would cause undue delay. “Undue delay is delay that prejudices the nonmoving 8 party or imposes unwarranted burdens on the court.” Davis v. Powell, 901 F. Supp. 2d 9 1196, 1212 (S.D. Cal. 2012) (internal quotation marks and citations omitted). Although 10 Defendants contend Plaintiffs’ repetitive amendments have delayed the proceedings and 11 caused this case to stagnate at the motion to dismiss stage, (Defs’ Resp. in Opp. (“Opp’n”), 12 ECF No. 46, at 6), granting leave to amend would not change the procedural posture of this 13 case or require Defendants to repeat any actions they would not have otherwise taken. 14 Plaintiffs have already filed a FoAC and Defendants have not yet responded. Accordingly, 15 allowing Plaintiffs leave to file the FiAC would not prejudice Defendants. Moreover, the 16 Court will need to address any future motion to dismiss—whether it is a motion to dismiss 17 the FoAC or the FiAC. As such, granting leave to amend would not “impose unwarranted 18 burdens on the [C]ourt.” See Davis, 901 F. Supp. 2d at 1212. 19 B. Bad Faith or Dilatory Motive 20 There is no evidence of bad faith or dilatory motive here. Indeed, Defendants do not 21 argue Plaintiffs’ motion was filed in bad faith. Rather, Defendants argue Plaintiffs fail to 22 meet the “good cause” standard required by a party seeking to amend the Court’s scheduling 23 order. (Opp’n at 4–5.) To that end, Defendants argue the good cause standard is typically 24 not met when, as here, “the party seeking to modify the scheduling order has been aware of 25 the facts and theories supporting amendment since the inception of the action.” (Id.) (citing 26 in re Western States, 715 F.3d at 737). However, Plaintiffs made their request for leave to 27 amend after meeting and conferring with Defendants and pursuant to a joint motion for an 1 extension of time to file a response or reply, which the Court granted on June 10, 2020. 2 Accordingly, Plaintiff meets the “good cause” requirement. 3 C. Prejudice 4 Next, Defendants contend they would suffer prejudice because the FiAC is “the fifth 5 massive pleading that Defendants will have to analyze and respond to,” by preparing 6 another motion to dismiss. (Opp’n at 7.) “[C]onsideration of prejudice to the opposing 7 party … carries the greatest weight” among the Foman factors, therefore “[a]bsent 8 prejudice, or a strong showing of any of the remaining Foman factors, there exists a 9 presumption under Rule 15(a) in favor of granting leave to amend.” Eminence Capital, 10 LLC v. Aspeon, Inc., 316 F. 3d 1048, 1052 (9th Cir. 2003) (internal citations omitted) 11 (emphasis in original). “The party opposing the amendment bears the burden of showing 12 prejudice.” DCD Programs, 833 F. 2d at 186–87. Plaintiffs contend there is no prejudice 13 to Defendants because they agreed in a joint motion to allow Plaintiffs time to file the 14 present motion in exchange for an extension of time to file their responsive pleading. (Reply 15 Br. at 6.) The Court agrees with Plaintiffs and finds allowing the proposed amendment 16 would not prejudice Defendants. 17 D. Futility 18 Although the previous three Foman factors weigh in favor of allowing leave to 19 amend, a motion for leave to amend may be denied if it appears futile or legally insufficient. 20 See Gabrielson v. Montgomery Ward & Co., 785 F. 2d 762, 766 (9th Cir. 1986); Bonin v. 21 Calderon, 59 F.3d 815, 845 (9th Cir. 1995) (“Futility of amendment can, by itself, justify 22 the denial of a motion for leave to amend.”). “[A] proposed amendment is futile only if no 23 set of facts can be proved under the amendment to the pleadings that would constitute a 24 valid and sufficient claim or defense.” Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th 25 Cir. 1988), implied overruling on other grounds rec’d by Ashcroft v. Iqbal, 556 U.S. 662 26 (2009). “A proposed amended complaint is futile if it would be immediately subject to 27 dismissal.” Nordyke v. King, 644 F.3d 776, 788 n. 12 (9th Cir. 2011) (internal quotation 1 marks and citation omitted), aff’d on reh’g en banc, 681 F.3d 1041 (9th Cir. 2012). 2 Accordingly, the proper test to apply when determining the legal sufficiency of a proposed 3 amended complaint is “identical to the one used when considering the sufficiency of a 4 pleading challenged under Rule 12(b)(6).” See id. (quoting Miller, 845 F.2d at 214) 5 (internal quotation marks omitted). 6 Defendants contend Plaintiffs’ proposed FiAC is futile because it suffers from the 7 same deficits outlined in the Court’s Order Dismissing the TAC, and would therefore be 8 subject to immediate dismissal on a Rule 12(b)(6) motion. (Opp’n at 8–9.) Plaintiffs 9 disagree, arguing the proposed changes in the FiAC meet the standards for specificity under 10 Federal Rule of Civil Procedure 9(b). (Reply Br. At 6.) Furthermore, Plaintiffs contend 11 Defendants’ arguments are better suited for analysis on a fully briefed motion to dismiss. 12 (Id.) 13 As noted above, the other three Foman factors weigh in favor of granting leave to 14 amend at this time, and Defendants have not yet filed a motion to dismiss the FoAC. 15 Although Defendants set forth reasoned arguments about the futility of Plaintiffs’ amended 16 claims, the analysis of whether Plaintiffs’ FiAC is futile is better suited for disposition on a 17 future motion to dismiss. See Griggs v. Pace Am. Grp., Inc., 170 F.3d 877, 881 (9th Cir. 18 1999) (noting that amendment should be permitted “unless it will not save the complaint or 19 the plaintiff is merely seeking to prolong the litigation by adding new but baseless legal 20 theories”). Accordingly, the Court “defers consideration of the merits” until after Plaintiffs 21 file the FiAC. See Gibbs v. San Diego Child Support Servs., No. 14-CV-2541 DMS (BLM), 22 2017 WL 1321372, at *2 (S.D. Cal. Apr. 10, 2017) (declining to deny motion for leave to 23 amend on futility grounds when the other Foman factors weighed in favor of granting leave 24 to amend). 25 E. Previous Amendments 26 Finally, the last factor of analysis—“whether plaintiff has previously amended his 27 complaint”—weighs against Plaintiffs at this time. See in re Western States, 715 F. 3d at 1 || 738-39. “A district court’s discretion to deny leave to amend is ‘particularly broad’ wher 2 || the plaintiff has previously amended.” Salameh v. Tarsadia Hotel, 726 F. 3d 1124, 113: 3 || (9th Cir. 2013) (quoting Sisseton-Wahpeton Sioux Tribe v. United States, 90 F. 3d 351, 35: 4 || (9th Cir. 1996)). Here, Plaintiffs have amended their complaint four times, and the Cour 5 ||has granted leave to amend twice. Although the Court has “wide discretion in granting o 6 || refusing leave to amend after the first amendment,” the Court declines to deny this □□□□□□ 7 those grounds. See Rich v. Shrader, 823 F. 3d 1205, 1209 (9th Cir. 2016) (interna 8 || quotations marks and citations omitted). Instead, the Court is “guided by the underlyin: 9 || purpose of Rule 15—1to facilitate decision on the merits, rather than on the pleadings o 10 || technicalities.” See Roth, 942 F.2d at 628 (quoting United States v. Webb, 655 F.2d 977 11 (9th Cir. 1981)). 12 13 Tl. 14 CONCLUSION AND ORDER 15 For the foregoing reasons, Plaintiffs’ motion is granted. 16 IT IS SO ORDERED. 7 Dated: August 20, 2020 J ] \ rn Yn. 18 Hon. Dana M. Sabraw 19 United States District Judge 20 21 22 23 24 25 26 27 28